"The ratings agency said late Thursday that the banks were downgraded because their long-term prospects for profitability and growth are shrinking.

"The ratings agency said it was especially concerned about banks with significant capital market activities during a time of increased volatility in markets."

Credit Suisse, the second largest bank Switzerland, was most severely affected, cut by three levels.

"The downgrades may force banks to post additional collateral to trading partners in derivatives deals while boosting the companies' borrowing costs," reports Bloomberg. "Moody's said when it announced the review that it was seeking to reflect the banks' reliance on fragile confidence in funding markets and increased pressures from regulation and a difficult market environment."